Hi everyone!
I would like to ask if there is a “mandatory” or “normal” or “customary” or “minimal” seasoning period on any particular house before a lender will give me a new first mortgage.
If I buy a house to rehab using a hard money lender, how long (or how SOON) can I get it refinanced in order to get out from under the hard money rates? The HML I’m dealing with now (through my broker) is offering “NO PAYMENTS for the duration of the owner-occ, purchase/rehab loan” (12 months), which will then be rolled into the back-end refinancing, should I choose to go with them.
Am I missing something here or am I looking for trouble?
I can give particulars on the deal if needed.
BTW, this is my first deal (potentially).
Thanx for any responses.
I would like to ask if there is a "mandatory" or "normal" or "customary" or "minimal" seasoning period on any particular house before a lender will give me a new first mortgage.
It will depend on the parameters. “A” paper lenders have no seasoning issues. In sub prime,12 months seasoning is the generally the standard. However, There are several lenders that will do “no seasoning” loans. The major issue is the rate and most will require a prepayment penalty.
There are no-seasoning lenders and lenders with up to 12 months seasoning. The exercise is in finding them ;D
i thought i answered this one, but maybe not. the typical seasoning is 12 mos, but there are non-seasoning refi’s out there especially for o/o and even n/o/o’s. my banks love to see me coming because they know i am always looking for the most creative financing out there for my investors.
With some lenders you may take a hit [bump] in rates for having a program with no-seasoning.
Depending upon your credit score and monthly gross… I can offer you a few no-seasoning lenders. What state are you in? For instance, today I was able to get a prime credit borrower a 6.3% 30yr. Fixed on 100% financing on a $500,000 Purchase w/No Seasoning or Prepayment Penalty.
Where’s Pen & Teller when ya need’m? Here, I’ll call it…Bull Sh@#.
1st- If you are dealing with normal conventional lenders then there are no seasoning requirements for most of them. Fannie Mae and Freddie Mac, who set the guidelines for these lenders, do not have restrictions. Borrowers who are credit challenged and may need a nonconforming lender will run into seasoning issues when trying to refi. Most of those lenders are at 12 months while a couple are 6-8. If you have at least average credit and are dealing with a broker that tells you otherwise then you may be working with someone who does not know what they’re doing.
2nd- Please clarify for the readers on what type of mortgage the 6.3% was received. Owner or NonOwner? You mentioned this was on a purchase. His question was for lenders that do refinances. How much in origination, discount, broker, application, or commitment? Was this on a combo loan, if so, you forgot the 2nd mortgage terms. We know that you’d like to share “what a great rate” you have, but the truth is that no one lender has a monopoly on rates. Post like this hurt our industry by confusing investors who may be looking to base a deal solely off what you’ve exposed to them. If you feel that a rate absolutely has to be given out without a consultation then at least be detailed to all the terms for all readers.
Investment Loans,
I care about the flow of useful and truthful information for readers such as you do. Yes, I did get those rates for a client of mine. There are many unique factors that leads to that prime program… my previous post mentioned “prime credit borrower”.
To personalize each client’s factors and goals, we use the in-house algorithm software – it basically Googles a batch of lenders that have the highest & best benefit[s] for our client.
In this instance, the client is going Full-Documentation, Owner-Occupied with a mid-FICO of 750. I am using Provident Bank if you would like to know. I also produce volume for them so I sometimes receive 25-50 bps special on the rates w/21-day lock, when needed. A buydown wasn’t necessary in this case. Provident has similar programs for refinancing but again… every borrower is unique in their own way.
Happy Easter,